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WhatsApp said in a blog post Aug. 25 that the information collected will only be used internally to improve “services and offerings, like fighting spam across apps, making product suggestions and showing relevant offers and ads on Facebook.” The mobile phone messaging company made it clear that nothing shared on WhatsApp “will be shared onto Facebook or any” other app “for others to see,” it said.
The data and metadata that WhatsApp will send to Facebook “is the end all be all for the technology sector,” McAndrew said.
Facebook, which acquired WhatsApp in October 2014 for $21.8 billion, is the second largest internet media company in the world with a $354.6 billion market capitalization, Bloomberg data show.
More easily sharing customer data seems inconsistent with WhatsApp's privacy posture, McAndrew said.
Mountain View, Calif.-based WhatsApp offers end-to-end encryption, which only allows senders and recipients of the messages—via text, chat, voice or video—to view the content. Encryption is a strong privacy enabler, but one that many law enforcement officials decry as a means for criminals to evade detection.
WhatsApp has been locked in an encryption battle with Brazil over law enforcement agencies accessing content of conversations between persons under criminal investigation. The company has been shutdown three times by Brazilian judges for their refusal to turn over messages (15 PVLR 1536, 7/25/16). On each occasion, the Brazil Supreme Court overturned the lower court's decision.
Koum said that WhatsApp respects user privacy and that is the reason why they rolled out end-to-end encryption. “No one can read your messages other than the people you talk to,” he said.
McAndrew, who is also a former federal cybercrime prosecutor in the U.S. Attorney’s Offices for the Eastern District of Virginia and for the District of Delaware, said that even with the foreign encryption fight and potential consumer backlash it isn't surprising that WhatsApp would monetize its users. A company wouldn't sell for over $20 billion “if they never had plans to monetize their customer base,” he said.
Users will have 30 days to opt out of having their information shared with Facebook, but the opt-out may not cover all data that may be shared with the social media giant.
Nate Cardozo, senior staff attorney at privacy advocacy group Electronic Frontier Foundation, told Bloomberg BNA Aug. 25 that it remains to be seen “how the opt-out is going to work in practice.” The WhatsApp opt-out allows the company to share data with the Facebook family of companies to help secure systems, fight spam and infringement activities, he said. “What exactly is an infringement activity and how Facebook will use the data is the most alarming,” he said.
It is also “unclear whether new users may opt out of Facebook sharing,” Cardozo said. If new users are forced to share their data with Facebook “it would be very disappointing,” he said.
Although engaging in blanket data sharing with Facebook may harm consumers by sharing sensitive information, allowing companies to send messages that users consent to is a good expansion of WhatsApp business model, Cardozo said.
Charging companies to send messages to consenting users is a great way to monetize the data without harming privacy interests, Cardozo said.
Facebook didn't immediately respond to Bloomberg BNA's e-mail requests for comment.
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The WhatsApp blog post is available at https://blog.whatsapp.com/10000627/Looking-ahead-for-WhatsApp.
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